CESC seeks BCG advice to power ahead

Calcutta, July 30: CESC Ltd has appointed Boston Consultancy Group to chart its next phase of growth.

BCG’s mandate will be to identify areas within the power sector that are showing signs of revival after the Modi government came to power.

CESC is the flagship company of the RP-Sanjiv Goenka Group, which supplies electricity to Calcutta and is involved in different kinds of power generation — thermal, hydel, solar, wind — along with standalone distribution.

“We are doing well in all segments. But we cannot scale up in all areas. And there are many views within the organisation. Therefore, we need an outsider to guide us,” chairman Sanjiv Goenka said.

The next phase will span five to seven years, Goenka said after the annual general meeting of the company, adding that BCG will submit the report in six months.

CESC has been a predominantly thermal power producer. It has distribution licences for Calcutta and Noida.

Several distribution franchisees are likely to be up for grabs soon and CESC will look at them, too. BCG will offer its inputs on the cities the company could look at.

BCG will also advise CESC on enhancing its customer outreach.

“We are introducing several customer friendly initiatives, many of them are e-based. There will also be some for elders and the physically challenged. The managing director himself will be available to interact with customers on a regular basis,” Goenka said.

On the decision to not bid aggressively for ultra mega power projects some years back, he said: “That decision has paid off.”

Industry observers said when companies approach foreign investors to raise funds it helps to have a report from an international consultancy. CESC may tap this route to support its expansion plans.

Haldia plant

The company will start producing from its Haldia plant in October, adding 300 mega watt to its generation capacity. Another 300MW will come on stream by January. CESC will close its operations at the old Cossipore generation station in north Calcutta after that.

The additional generation capacity will reduce CESC’s dependence on power sourced from state utilities.

CESC today reported a 15 per cent jump in net profit during first quarter ended June 2014 at Rs 151 crore against Rs 131 crore registered in the same quarter last year.

However, the retail business under Spencer’s continues to be a drag on CESC but was close to become positive in terms of EBITA (earnings before interest, tax and amortisation).